Air Canada's net profit up 298pc to US$1.09 billion as sales rise 5.5pc
AIR CANADA posted a 298 per cent year-on-year increase in net profit to C$1
AIR CANADA posted a 298 per cent year-on-year increase in net profit to C$1.47 billion (US$1.09 billion) in 2019, drawn on revenues of C$19.1 billion, up 5.5 per cent.
Air Canada's fourth quarter net profit came to C$152 million against a year-on-year net loss of C$360.
'I am very pleased to report strong fourth quarter and full year results for 2019, a year in which we generated record revenues in excess of C$19 billion,' said Air Canada CEO Calin Rovinescu.
These record gains were made, he said, despite the loss to Air Canada of 25 per cent of the company's narrow-body fleet for most of the year following the worldwide grounding of crash-prone Boeing 737 MAX.
'We also look forward to completing our proposed merger with Transat AT, which was approved by nearly 95 per cent of Transat shareholders last summer and now remains subject to applicable regulatory approvals.
'We start 2020 with uncertainty from the on-going Boeing 737 MAX grounding and the constraints it imposes, as well as emerging economic and geopolitical risks and route suspensions resulting from the coronavirus,' he said.
Air Canada expects first quarter 2020 profit to be C$200 million less than the first quarter of 2019 due to the impact of recent service suspensions to mainland China and from Toronto to Hong Kong.
The downturn is also due combined with a higher proportion of projected annual operating expense increases in both aircraft maintenance and employee benefits in the first quarter of 2020.
Air Canada expects aircraft maintenance expense to increase by C$150 million from the full year 2019, with one-third of the increase expected to be incurred in the first quarter of 2020.
The projected cost increase also includes the impact of additional Airbus A330 aircraft in the operating fleet (which are under power-by-the-hour arrangements) and a higher volume of engine maintenance activity year on year.